Settlement Boycott Call Likely To Fall Flat

By most standards, SodaStream is a great Israeli success story. The company’s product, a home carbonating device for soft drinks, is sold by all major retailers in the United States. The company’s stock is traded in Nasdaq. But if a call to boycott products from Jewish settlements in the Israeli-occupied West Bank gains traction, SodaStream, with its manufacturing center in the West Bank settlement of Ma’ale Adumim, could become a target of protest.

Image: courtesy of peter beinart

Peter Beinart

Boycotting Israeli goods produced in exclusively Jewish West Bank settlements has been an integral part of the agenda of groups on the far left of the Israeli-Palestinian debate for years. But a March 18
op-ed
in The New York Times by prominent liberal author Peter Beinart could push the idea into the mainstream, or at least fire up a debate about its merits.

Beinart, a former editor of The New Republic, is a longtime Israel supporter who passionately backs a two-state solution to the Israeli-Palestinian conflict. In his op-ed, Beinart called on American Jews and others to distinguish between Israel within its internationally recognized pre-1967 borders — whose products he urged supporters of Israel to promote — and what he calls “nondemocratic Israel.” By this, Beinart meant the occupied territories on the other side of the Green Line that marks Israel’s pre-1967 boundary. Their continued retention, he fears, will mean the end of Israel as a democratic state with a Jewish majority.

Boycotting settlement products could send a symbolic message to Israelis, as Beinart suggests. But on a practical level, such a boycott would be hard to implement and its economic ramifications would be minimal. Israel and the United States do not keep records of settlement products sold in America, but based on existing trade data it is clear that the numbers are marginal.

In 2010, the United States bought $21 billion worth of goods from Israel. Diamonds, pharmaceuticals, electronics, machinery and medical products made up three-quarters of these imports. None of these industries has a significant manufacturing presence in the West Bank. For the most part, Jewish settlements in the West Bank are either bedroom communities for Israelis working within the 1967 borders or homes for service workers employed by the government and local authorities in the West Bank. Small industrial zones in East Jerusalem — which Beinart specifically exempts from his boycott call, though it lies beyond the Green Line — and around the major settlement blocs manufacture mostly for the local market and are not significant exporters.

Therefore, a settlements boycott, even if carried out in full, would hardly make a dent in the Israeli economy— or even in the settlements’ own economic condition.

To have an effective symbolic impact, supporters of Beinart’s proposal would have to focus on several high-profile goods identified with West Bank Jewish settlements. The product most commonly targeted by boycotters is a line of cosmetics made of Dead Sea minerals and marketed under the brand name Ahava. In 2009, the activist group Code Pink launched a
campaign
to boycott this company’s products, which are manufactured in Mitzpe Shalem, a kibbutz built in 1976 on lands that Israel gained in the 1967 Six Day War. Despite numerous demonstrations and calls to refrain from purchasing Ahava’s creams and bath salts, they are widely sold throughout the United States, with an annual sales drive in malls before the holiday season. The company, which is privately held, does not provide detailed information on its sales.

Additional settlement exports include foods and wines sold in small quantities in kosher grocery stores in the United States.

Going beyond a direct boycott of goods produced in settlements starts to get tricky.

First, there are companies in the West Bank that make components for products sold in the United States by other companies. Ha’argaz, a metal company, located in the Barkan industrial zone, near the Jewish settlement town Ariel, makes technological products used by leading Israeli defense industries. The Israeli defense firms, in turn, sell some of their products to the U.S. military. There is no easy way of knowing which defense systems exported to the United States contain parts made in a settlement factory.

Then, there is the issue of companies whose goods come from several places. The Mehadrin Group, Israel’s single largest fruit exporter (whose brands include Jaffa oranges), is headquartered in Israel proper, and most of the goods it sells are not from settlements; but it does own a few facilities in the territories.

An Israeli watchdog group, Who Profits, has set up a website that
monitors
economic activity in West Bank settlements and lists companies doing business beyond the Green Line. The group’s founders, Dalit Baum and Merav Amir, told Israel’s business newspaper Calcalist two years ago that their website pursues the type of economic activism seen worldwide in cases such as the fight against child labor at Nike or the campaign to stop business ties with Iran.

But the Who Profits list suggests one of the key hurdles facing would be boycotters targeting just West Bank settlements: Most companies on the list do not export to the United States. A direct boycott going after their products will not make much of a difference.

Beinart, in a March 21 phone interview with the Forward, acknowledged that the potential economic impact of his proposal was limited. “Do I think that a settlement boycott will bring the economy of the settlements to its knees?” he asked rhetorically. “No. But will it be noticed? Yes.” He pointed to several successful boycott actions centered outside the United States that appear to have contributed to decisions by several Israeli businesses in the West Bank to move to Israel proper.

Beinart stressed, however, that he does not advocate a boycott in cases where there is no way to clearly distinguish between products made in settlements and those produced in Israel. “I won’t support boycotting a company only because it has a branch in the West Bank,” he said.

Beinart’s boycott proposal differs in important ways with a model already adopted by European governments. In most European countries, there is strict legislation requiring that products made in the West Bank settlements be clearly marked as such. Some countries also exclude these products from favorable tariff treatment enjoyed by products from Israel proper.

European public opinion also makes it difficult for firms to invest in companies operating in the West Bank. These restrictions, as one small pretzel manufacturer learned, carry much more weight. Beigel & Beigel was owned by the European food giant Unilever and was located in Barkan. But following pressure from European activists, Unilever decided to move the plant to a location inside Israel. Such was the case also with a door lock manufacturer owned by a Swedish firm that decided to relocate the factory after hearing from activists and shareholders.

These moves go far beyond a consumer boycott as proposed by Beinart. Actions against European firms that own or control West Bank companies have the potential to affect the bottom lines of larger foreign companies operating within settlements, whereas the call for American Jews to read the label before filling their shopping cart for Passover would be no more than a symbolic move.

Beinart also calls in his article for cancelling tax breaks for donations made in the United States to settler charities. A New York Times investigation in 2010 found at least 40 American groups that had collected more than $200 million in tax-deductible gifts for Jewish settlements in the West Bank and East Jerusalem over the last decade. The U.S. tax code makes no distinction between charities in Israel and those operating in West Bank settlements.

Beinart’s boycott call has stirred strong emotions within the Jewish community. Most major organizations, including the dovish lobby J Street, rejected his proposal. Israel’s ambassador to the United States, Michael Oren, declared that Beinart’s stand placed him “well beyond the Israeli mainstream, the moderate left and the vast majority of Israelis who care about peace.” The Anti-Defamation League’s national director, Abraham Foxman, said in a
letter
to The New York Times that a boycott would “encourage and worsen around the world the delegitimization campaigns against Israel.”

But on the Jewish left there is more openness to the idea.

Americans for Peace Now has already endorsed a boycott on settlement products while making a distinction similar to that of Beinart between Israel and the West Bank. The group’s spokesman, Ori Nir, said that boycotting settlement products is a symbolic gesture “aimed not at inflicting real economic damage, but at underscoring that the settlements are damaging to Israel’s need for peace and security, and to its future as a democracy and a Jewish state.”

“If they have any other ideas to stop the growth of settlements, I am all ears,” Beinart said of his opponents. “But so far the Jewish mainstream is very complacent about settlement growth.”

Written by

Nathan Guttman staff writer, is the Forward’s Washington bureau chief. He joined the staff in 2006 after serving for five years as Washington correspondent for the Israeli dailies Ha’aretz and The Jerusalem Post. In Israel, he was the features editor for Ha’aretz and chief editor of Channel 1 TV evening news. He was born in Canada and grew up in Israel. He is a graduate of the Hebrew University of Jerusalem. Contact Nathan at guttman@forward.com, or follow him on Twitter @nathanguttman